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tv   Closing Bell  CNBC  August 11, 2009 3:00pm-4:00pm EDT

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other than a catchy acronym, it's becoming increasingly clear that the economies of brazil, russia, india and china, the so-called brix don't have a lot in common. the russian economy shrank 11% last quarter, an the largest contraction on record. plummeting commodity prices among the reasons and the government's failure to approve a stimulus package. car sales have been hit particularly hard down 50% in the first seven months of this year.
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the largest general motors dealership in moscow. compare russia with its neighbor china. massive $586 billion stimulus plan has so far been successful in part due to reliance coupons for direct purchases of things like cars and washing machines. from april to june, the economy grew at a reported 8%, goldman sachs predicts that growth will top 9% for the year. a lot of people are skeptical of it. stuck certainly have great questions about the magnitude. the real question is, should there be a new brick -- a new i, indonesia has as morgan stanley has proposed. thanks for watching. coming in on the closing bell. >> the treasury saw stronger than average demand in its say of $37 billion in three-year notes, part of the record sale of debt this week. stocks are lower. president obama says he may be
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able to get more than $80 billion in savings from the pharmaceutical industry, more than agreed to last month. he spoke at a new hampshire town hall meeting on health care reform. that's news now. i'm sharon epperson. stocks are off their worst levels of the day. equities showing modest losses in the homestretch. it is a broad-based selloff as we enter the most important hour of the trading day. welcome to the closing bell. i'm scott walker. >> i'm michelle caruso-cabrera at cnbc global headquarters. the we here at cnbc are pouring over the latest information coming from the treasury. a description of the last piece of financial legislation that is being sent to congress, proposed legislation to help prevent what we've all lived through for the last couple of years, the
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financial crisis. this is about how to regulate derivatives, credit default swaps its. we'll delve more into that see what kind of market impacts. let's show you what's going on. dow jones industrial average off its lows down 68 points, three-quarters of a percent, 92.70. nasdaq hit hard earlier on. lower still by 18 points. also off its lows, had been down as much as 25 points. 1974. the s&p lower by 9.5 points. nearly 1% decline. we are back below 1,000 on the s&p 500. >> our team is covering the markets today. in chicago, we start withure own bob pisani on the floor today. >> thanks very much. financials led the summer rally. the bank index up 30% in the last month. the big debate on the floor is whether financials will move down in the latter part of the summer. take a look at the big financial names. i've been emphasizing some of
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those financial outliers like american international group had been weak. a good report from them on friday. they went from 13 to 28 in a week? now that stock's been selling off a bit today. citigroup, went from 250 to 4, that's weak today. keycorp and big regionals also are. there is some clear profit taking here. so the important thing dick bove earlier on over at rockdale talking about bank stocks trading on fumes. this is typical of the certain sentiment as the bank index has gotten a bit overbouth. it's notinging that the rise have been driven by a change in psychology, not a near-term change in earnings. third to fourth quarter, earnings not to be terribly great here. another sector getting attention is the energy group.# generally weak demand, lower capital expenditures for big companies out there. we've had nice moves up. some of these stocks.
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by and large, they have underperformed the market recently and continuing to do so here today. even if you look at oil shipping stocks here, this group has gone nowhere throughout the summer. tanker rates for shipping oil remain depressed on weak demand and they've underperformed the whole market. teekay, tsakos, have gone nowhere this summer. the market is looking like, the dow jones industrial average down about 120 points. we're coming off the lows. most of the declines due to the four big financials in there. look at stocks like 3m, dupont, united technologies all on the upside. if weekend anywhere near positive, i mean 20 or 30 points to the downside, this would be a clear victory for the bulls given the weakness we saw in financials and energy stocks. trader talk.cnbc.com. brian, maybe you can give the dow a helping hand here. >> we're down about 1%. we are off the lows.
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. if you look at the internals declines advance three to one here. weakness is broad based. you could pick any smattering of the big names, almost all to the downside. chip sector, 1.9% for broad come. applied materials down 2.1%. estimates ranging for a loss of 8 to 9 cents a share. we'll see how their guidance is. intel said the pc market has bottomed. bob mentioned financials are weak hear. regionnals the t.a.r.p. administrators saying the banks might need more capitalization. huntington bank shares down 6.5%. oracle up .7 of 1%. palm it up nearly 1%. amgen i want to touch on, the fda briefing has benign concerns on the osteoporosis sis drug. price target of $72 on that stock. we've talked a lot about the chevy volt today. there are a lot of stocks that
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deal with alternative energy batteries. a couple of them, listen, ener 1 is a 24-year-old company seemingly getting a hit i also want to point out advanced abat is a chinese company based in new york with a lot of business over there.w if you want to diversify, that's one. fossil, guidance lower than expectations down 9%. let's see how the trade is going down at the nymex with matt nesto. >> the trade here saw the price of oil falling for the fourth straight day. we almost broke through $68 a t barrel. we firmed up as the dollar weakened today. it looked like we're going to have a strong dollar. as that trade turned it, so did the oil trade. we finished down about $1.25 today. the fourth consecutive down, the lows for the month for the price of crude. natural gas weak today. the first reminders that hurricane season is approaching.
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the national hurricane center citing a tropical depression way, way way out in the atlantic ocean. and they're keeping their eye on that. just a reminder to traders that hurricane season will be coming. we also saw heating oil weaker here today. the standout, the star of the commodity patch here is going to be the price of gasoline, doe analysts coming out and actually trimming their forecasts for the third quarter, fourth quarter and for next year. but those reduced forecasts are still well above the current price. that saw a big u-turn interday for the rbob contract and that saw it as the lone gainer here today. tomorrow, it's inventories in the morning. wait before you trade on that for the fed decision in the afternoon. let's get out to rick santelli in chicago. >> thank you, mr. northwest toe. well, before we get to the charts, remember as matt just pointed out, tomorrow is statement day. we know that quantitative easing is going to expire runoff,
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program right around mid-september. this is really the last meeting if the fed is going to have news for us probably to put it out in a timely fashion. we know there's another country that's embarking on upping quantitative aedsing, the uk. let's look at everybody's tenure, the six-month of our tenure. the three-year option didn't seem to an exhibit the markets. pay close attention to the pattern it, how relative high level based on the last significant high yield level in june. now let's look at the uk. even though the yields aren't the same, the patterns are remarkably the same. look at the euro zone. completely different pattern. yes, their yield's lower and has currency ramifications. >> what's the reason? i've asked people on the floor. two reasons reasons came out. one was maybe they expect it the u.s. and uk to come out of the funk first. you won't have gotten that from the bank of england's statement last time. maybe it's the quantitative
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easing and the government's involvement is something that doesn't have the consequence of keeping rates lower than thild otherwise be. michelle, back to you. >> thank you, rick. let's dig deep near what rick was talking about, the two-day fed meeting. economics reporter steve liesman joins us now with more on what wall street is expecting and hoping to hear tomorrow. >> expectations are pretty low for a significant shift in fed policy that comes from tomorrow's statement. but with so much on the line with all that which can was talking about, the statement is going to be scoured for clues when that policy shift could come because if the economy recovers, it will come. ben bernanke arrived for a two-day meeting that finds the fed in transition, unwilling to pin self down what it would do when the economy recovers. >> he's not going to do anything with the rates. he should give the impression they are considering all
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alternatives for the end game whenever that comes and it won't come real soon. >> the three main things on the agenda. this last phase of ballot she the expansion, remember the talf? they're going to be talking about the new tools to sterilize balance sheet growth, including using interest on reserves. whatever outlook there is for a rate increase. woo he don't know how much of any of those three things end up in the statement but it will be talked about. we have had better employment and data since the last meeting in late june. a big question, will they say anything about the $300 program to purchase u.s. treasuries which likely will max out in mid-september. >> steve, thanks so much. let's break down more of this market action today. we bring in chief investment strategist with the morgan stanley.
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gentlemen, good to have you here today. we've been making a lot today how it's the one-month anniversary of the start of the summer rally. is this the start of the summer selloff? >> we think it would be worrisome if the market had a roar to the upside. it's up 48% for the s&p off its march low. it's up 58% for the equal weighted s&p which gives more weight to the small cap stocks. it's up 98% for the valueline, a larger universe including nasdaq stocks. >> it sounds like you're worried now. >> up 128% for financial stocks. this is a very healthy development taking a breather getting ready for the next leg up which we are fully expecting, phrase two of this big bull market move up. >> you are saying the market is ripe for a pullback. >> wait for the fed. fed meeting is tomorrow. want to hear one phrase coming out of the fed, and that is not
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for the foreseeable future in terms of having to fight inflation, not for the foreseeable future something to that effect. watch for that phrase tomorrow. >> david, you saw some amazing stats, something like 88% of stocks are above their 200-day moving average. david darst went down the list of the reasons why this marked should be going down. is that another one? >> yes, it is. the earnings rally we've had, it's easy, you had an easy year over year compare. while companies beat earnings estimates, only about 25% beat on the top line. so the real problem is there's no demand. you can only cut your rate of prosperity by cutting costs so long. >> revenue growth was virtually nonexistent. >> we have a rally that went from i'm not going out of business to just momentum-led. but you can't have a continuing rally without real end demand and the consume ser not there. that 70% of gdp, consume ser
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basically dealing with unemployment, wages decreasing and a huge debt load. they've got to the pay down their debts. their houses is going down. >> when is that going to change? >> it's a long slow recovery. the worst is probably over. we're talking more than a year. we still have to solve real estate and bank solvency seems to be today's issue that we're not done yet. you don't want to be an equity investor in a financial institution if they've got to raise more capital. a long slog ahead. the market's gone from down here up to here and probably overshot. >> what kind of pullback are we talking about, david? >> we had a 7% pullback from june 11th to july 10th, scott. we would be very, very comfortable with a pullback of that nature. it's a very, very traditional pullback, 5 to 10%. 7% the last time, somewhere in the 5 to 10% range. don't forget is, people compare this pullback to 1930s and 1980s. 1930s you came out and had a
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depression. it dent down another 82%. 1970s, you came out and had a big inflation and the market traded black. we're constructed, positive and bullish about the market. >> is that square with what you think, david. >> if you think about it, when the market goes up so much in a short period of time, it's not earnings an or dividends that gave you return, it's basically valuation has expanded. given low interest rates, they can't expand a heck of a lot of more. companies have to start earning for real and it's going to take awhile. i this do think a pullback is in the cards. however, you can still make money. valuation sensitivity is very important and companies with revenue growth you want. >> i want to send it out to l.a. to julia boorstin who has breaking news regarding twitter. what's up? >> that's right. twitter is down again on thursday of last week, twitter
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and facebook suffered from a denial of service attack and they were addressing that problem which created a lot of slowness on the site because they were trying to put a security loss to prevent it from happening again. twitter is down again. the website 19 minutes ago they've been responding to the site down time and they will update. we're trying to figure out what the source of this is. this is starting to really affect the service of the social media sites. we have to start thinking long-term. can the companies prevent this because otherwise users will start to get really frustrated. >> an example julia of how flat the world is. wasn't that denial of service take related to the russian chechnian conflagration over there. >> yeah that, denial of service attack was attacking a certain blogger who was advocating for the state of georgia. >> georgia, not chechnya. >> in the caucuses, yes. that country of georgia, and so that was all trying to shut down
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his usage of the site. as a result, the entire site went down. there was a lot of really slow service at facebook. the question is, if that can shut down the site and who's data is not secure, whose data is secure and what does this mean for the site going forward. twitter did take very active steps to try to protect the site on friday which is why service was slow on friday. here we are and the service is down again. >> keep us up to date. there's about 45 minutes before the closing bell. dow jones industrial average and the nasdaq in negative territory. let's see how we did as we head towards the last 45 minutes. >> opec predicting oil demand will fall further than previously expected next year. we'll ask top executives where they see prices heading. >> plus the volatility index has been cut in half since early march. the vic. options traders are betting it's ready for a comeback. >> and after the bell, a new
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report suggesting the housing market may not be out of the woods. we'll tell you how and why and discuss if housing could hold up an economic recovery today at 4:00 p.m. eastern. >> but first, the four most active stocks led by citigroup down by three cents, 3.74 a share. eseseseseseseseseseseseses
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small business owners turning a little more pessimistic about business conditions over the next six months. the national federation of independent business says its small business optimism index fell 1.3 points last month, the second consecutive monthly decline despite some indications the economy may be stabilizing. monday's earthquake earthquake disrupteded corning's production. because of that, production will be suspended for some time au resulting in lower glass volume for the third quarter although it will not have a material impact on earnings. general motors says its volt electric car will get an
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astounding 230 gallon miles per gallon more than four times is the prius. the operating costs work out to less than 3 cents per mile. the epa has yet to certify that mileage. >> julia has more details on the twitter outage. >> our twitter pages are working again. the twitter status page has not updated and still says they're responding to site downtime. it does seem to be working. i just have to say this is a testament to how everyone is obsessed with twitter. a 20-minute outage seems like a big deal. back over to you. >> twitter addicts out there, i'm not one of them. thank you. opec saying that a slow economic recovery and higher suppliers from non-opec countries will cause global demand to fall further than expected in its latest forecast.
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joining us now is floyd wilson, chairman and ceo of petro hawk be energy. guys, good to see you. mr. wilson, opec says demand is going to be even lower next year than people thought, which is already pretty low. is that your assessment of the energy demand in the world, as well? >> you know, michelle, petro hawk is so deeply involved in the natural gas business about, 95% natural gas, probably don't have as good a read on that as you might think being in the energy business. >> what do you see in terms of natural gas demand then? >> natural gas demand has gone through a turnaround the past year. demand is down due to recession and supplies are up because of the success in these great she'll plates in the united states. so we're expecting, i'm expecting prices to be soft for a bit longer. there have been enough rig cuts,
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you know, rig usage doubts help the supply side out a bit. >> mr. wilson, do you also expect soft demand? let's bring up the chart in the meantime. i was shocked to see the price of natural gas if you could bring it up. i remember a little more than a year ago, folks on this network contributors predicting natural gas was going to hit 20 bucks. today 80s at $3.50. mr. wilson, what's your prediction on pricing for the next year or so? >> i think the rig cuts will have an impact on supply. that should it be positive. the wildcard for me is demand. that has to do with this recession. >> i'm sorry, i meant to go to mr. ventura. what do you think? >> i think in the short term, could you see continued softness in natural gas. i think and to protect against that ranges over 0% hedge that an average floor of 7.50 which is double the current price. sometime next year you'll see
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natural gas recover. and we believe we've got, you know, the ability to grow ten times in front of us and at those prices, i'm excited where we are. >> why do you think you'll see a recovery in prices when we hear from opec they think demand is going to be softer. when the price of oil goes down it, ends up pressuring all energy and commodity prices. >> well, oil trades more internationally than gas, natural gas is a domestic fuel. like floyd said, with the she'll plates, there's four big she'll plays that have changed the outlook of gas reserves for the country. with that domestic reserve, pressure for cleaner environment and energy independence, that -- and i think the u.s. economy will pick up as well come maybe late third, fourth quarter. i think you're going to zero bust gas prices and the shell players, the low cost producers are going to be the winners in that environment, both petro hawk and range. >> 25 million new shares. you're raising capital. what are you going to do with
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the money? >> well, it was a mainly being used for acquisitions in our key areas and a little bit of a safety factor given the current softness in the natural gas prices. >> you think you could could have raced this capital four or five months ago or is the rebound in the markets helping out here? >> clearly the rebound in the market has helped a tremendous amount. four or five months ago, i wouldn't have tried. it worked out just fine though. >> congratulations to you on that. thank you. enjoy the rest of the conference. >> thank you. >> thank you. >> much more from the intercom energy conference still to come. the chairman of xto energy today at 4:00 p.m. eastern time. >> michelle, we have about 35 minutes to go before the bell. the dow and nasdaq both down today just shy of 1%. the financials leading the way to the downside, citi is down 5%, bank of america down 4%,
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perhaps the note from the dick bove weighing on financials. >> coming up next, we'll talk more about that as we take another look at the markets and where today's selloff may be creating attractive entry points. we're coming right back. i never thought i would have a heart attack, but i did. you need to talk to your doctor about aspirin. you need to be your own advocate. be sure to talk to your doctor before you begin an aspirin regimen. you take care of your kids, now it's time to take care of yourself.
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bric.
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let's take a look at some of the day's research calls. the latest upgrades and downgrades. qlogic upextra graded to center perform because of an expansion
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in profit margins and stronger demand due to a new intel product. yum brands downgraded to neutral from buy at ubs. analysts concerned about sluggish sales that the owner of the fast food chains. and dnagy cut. scott? >> and michelle, it's such a critical time for investors weigh thought we would bring back in the two davids, david darst, chief investment strategist with morgan stanley, david furle. we left off the conversation a few minutes ago saying we thought the market was going to go down. retail sales coming out this week. it's going to be a key thing for investors to digest. david if your lick to get a pretty good read on the consumer. >> the consume ser is going to still be pretty weak. one of the interesting issues has been the cash for clunkers. consumers are buying a durable if they can get one of those
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cars which is going to take away from more discretionary purchases, apparel, other retail. it's going to be a very anomalous period. the consumer is probably weak earn will probably stay that way for a number of months. >> looking for the number this thursday to come out on retail sales, up 1.3%. a lot of that is auto. the auto you take out, up only 0.1%. a big chunk of it automobile sales. a week from friday, which will be the 21st of august, you want to watch the lead economic indicators. and it's expected they'll be up for the fourth month in a row, 0.7%. that's another thing after the retail sales. >> how about the fed? two-day meeting starts today. no move expected. do we need to hear anything regarding exit strategy? david burl. >> in the short term, there is no inflation really. they should do nothing. this has been the one positive.
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they can print money. their monetary policy has been really, really positive, much more so than fiscal stimulus has been. the monetary policy can continue to worry if sometime in the future we're going to go from slow recovery to acceleration and inflation will take off like a shot. we've seen it in commodities even with a pretty slow economy. it's a big risk but you can't tell yet. it's not a problem in the near term. >> david darst, let me ask you about commodities. are we entering a new paradigm for the dollar. >> we just added. we took it from 4% to 6% based on the supply has not been increased. we see global demand all over the world, emerging markets somewhat in developed markets. we see the commodities complex, including precious metals, base metals, agriculturals and energy, those four as an area that people should have
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portfolio exposure to. >> what about the dollar? what about this thought that the dollar is entering a new paradigm? the dollar is going to be strengthened not on the safety trade anymore but the economy is turning around. >> the september 24th, 25th in pittsburgh will be the g-20. right now, things are pretty stable. the u.s. is recovering we think and therefore, the fed's going to be able earlier than everybody thought to lift rates. the dollar could surprise people. it's right around where it's going to be year-end this year. we see a little gradual weakness. u.s. wants that stimulus without getting caught putting its hand in the cookie jar. weakening the dollar too quickly. >> david, darst says he likes commodities. what do you like? >> there's only one really controversial sector in the economy and that's health care. it's a real political issue, obviously. there are winners no matter what happens. as a for instance, laboratory companies. all sides agree we have to get
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more people in the health care system. more people mean more testing. testing is a very cost effective way to treat people for health care. so lab corp of america is one of our stocks. no matter who comes out with what plan, you're going to see more people in the system taking more tests. >> are you guys on the tech bandwagon still? are you off? >> we want to see people have more exposure to big cap multinational companies, and that plays right to tech. that's ibm it, microsoft, it's google, it's intel. you want to own those four big tech companies. they've not moved up as much as some of the smaller stocks. another area you want exposure to for global growth is japan. next year, earnings supposed to rice 62%, 30% in the united states. gdp up 3.5% this second half of the year. price to book is 1.3 times versus two times for the united states and don't forget, august
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30th, it's a sunday in japan, they have elections and we expect they're going to change parties and expect a big boost just like they had in taiwan march 22nd of 2008, scott. >> the final word, david furl. >> look for revenue growth in a stock and a reasonable evaluation very profitable like microsoft, generates $1.5 billion in free cash. good revenue growth next year because of windows 7 and their new deal with yahoo! >> you like the yahoo! deal. >> it's trik for microsoft. you need a quality number two player. revenue growth and profitability. >> the great discussion. thanks so much for join us. michelle, about 25 minutes or so before the close here. the dow jones industrial average down about 62 points. we did say a broad based selloff. >> markets still up double digits over the past month. next, we'll tell you why options traders are betting that the
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summer rally will not survive september. that's in our "fast money" segment after this. these days, wouldn't it be great if saving money happened as automatically as everything else? at bank of america, it practically does. use the bankamericard power rewards visa credit card and earn rewards like cash back with every purchase. cash you can put into savings. or even use to help pay down your credit card balance. it's one of the many ways we make saving money in tough times a whole lot easier.
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>> welcome back. 30 minutes left till the closing bell. dow jones industrial average lower by about 74, 75 points.
quote
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trading right now at 9,262. had gone all the way to 9216. so off the lows, but still pretty broad based selloff today. ditto for the nasdaq getting hit by about 17 points. 1975 is where it stands right now. the s&p 500 is back below 1,000, off by ten points or 1%. 996. scott? >>en michelle, it's time now for the "fast money" final call. my next guest says the vix is pricing in a big move. reasons for investors to start protecting their positions. jared, how is it going. >> i'm great. >> vix about what, a one-month high? are you starting to feel queasy. >> a little bit. options are great because they can give us a free look into what's happening behind it the marketplace in terms of insurance premiums. the market's been moving, let's say the s&p varies about 11 to $12 a day for the past two weeks or so.
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the vix is saying it should be moving at about 17 or $18 a day. but the bottom line is, there's really nothing going on. the market's been rallying. everybody loves earning. what this is telling me is this extra premium is there because investors are buying and not retail investers big institutional investors are buying puts, buy protection. what that means is retail traders need to start looking at the same thing. >> translate that the means for the investor watching based on what the vix is telling me. >> you've got the strata. calls and puts. we see where they're pricing out. the spy, the august -- i'm sorry, the september 100 straddle is pricing at 7.25. that basically means it's realistic there's going to be a 7.25% variation or almost 8% variation from here till august. or till september. that's scary to me.
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what that means, if you're in a profit right now, it's time to start maybe a, unwinding some of that profit if you're not comfortable with options or b, selling some calls something like the september 100 call. you can bring in a dollar actually, 100 call, you can bring in a dollar to help offset some of your risk. >> explains what a collar is, why you like it and it could be a good thing now. >> the sell of a call and the purchase of au put. let's say i own the 1 py 95. i might sell the 100 call, bring in $1.20, and at the same time, buy something like the 92 put maybe for i don't know what they're trading at for 50 or 60 cents. that locks in a specific price for my spy. i lock in the 92 sale price, plus i bring in a 40 cent or 50 cent premium. it helps to lower my cost phases and gives me an absolute insurance premium, absolute lok-in price to sell my stock
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at. >> the bottom line is you're selling the call for more than what you pay for the put here. >> that's the key here. a, it's not going to cost you anything for the insurance policy. yes, do you have some upside risk. in other words, if the stock -- if they were to blast up to 105, you might have to sell it at 101 or 101 depending on what call you sold. if you own it at 95, who cares if you have to sell it at 101. you've got it take control of your greed. that's a problem a lot of retail traders have. >> jared, we'll catch you soon. coming up, as the summer rally turns into the summer selloff, what's the best way to present your profit. first interview with bob lutz on the future of the gm company and the american auto industry live at 5:00. >> speaking of the auto industry, just crossing, the obama administration apparently weighing vouchers for future clunker sales. don't know what that means. we're going to look into that
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more. obviously they like what they've seen with car sales. we've got about 20 minutes left before the closing bell. the nasdaq is off by about 17 points. >> michelle, up next, we're talking health care reform with the cfo of walgreen's. find out how obama's proposed changes would impact the chain's business. >> after the bell, should the treasury department help clean up toxic assets from the balance sheets of small banks? is that group worth investing in right now? we'll have answers at 4:00 p.m. eastern time on the "closing bell." [ engine revving ]
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[ engine powers down ] gentlemen, you booked your hotels on orbitz. well, the price went down, so you're all getting a check thanks. for the difference. except for you -- you didn't book with orbitz, so you're not getting a check. well, i think we've all learned a valuable lesson today. good day, gentlemen. thanks a lot. thank you. introducing hotel price assurance, where if another orbitz customer books the same hotel for less, we send you a check for the difference, automatically.
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taking a look now at some of today's under the radar stocks, rack space reporting a 67% jump in second quarter profits to 7 maryland. revenue rising 16% to $152 million beating wall street estimates. technology outsourcing company broad ridge financial solutions reporting better than expected 20% increase in fourth quarter
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profits to $117 million because of lower expenses. favorable tax rates. and watch maker fossil's second quarter net income dropping 34% to $17 million. that did, however, beat wall street estimates. the company is warning the weak economy will likely result in third quarter earnings missing analysts' expectations. >> can na cord adams is holdingis global growth conference today. the hot topic of information, health care reform. an important but little heard voice from that entire discussion is that of pharmacies. joining us from the conference is walgreen's cfo we'd mcquellen. good to see you. >> thank you, nice to be here. >> tell me about what is your dog in this fight when it comes to health care reform? how do pharmacies feel we should approach this huge issue? >> well, you know at the end of the day, everything is moving towards more access, more affordability and good prevention and better prevention. i think walgreen's is very well
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positioned to help in health in america in that regard. >> what about the public option? is that something are you for or against when it comes to being a pharmacy? >> you know, i think we sternal support the three tenets i support. employers need to play a role and walgreen is i think a very good role model in that regard. >> what about the move toward more and more generic drugs? that seems to be part of the push. president obama in that health care town hall in portsmith said he was looking to push generic drugs more quickly into the market rather than the length of time it takes right now. does that help or hurt you if that happens? >> i mean for us, that's a good thing. i would say we support whatever's good for the patient and payer. many times generics are exactly that. in general, we tend to make more money on generics and branded. i think it's what's good for the patient and pairs.
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we support that. >> can we move onto the economy? what are you seeing on the ground when it comes to sales and wloornts we are seeing any signs of a turnaround which some of the economic data has indicated? >> i don't know if i would say turn around or not. things are stabilizing. we do see consumer shoppers under financial duress. you see people buying more private label, seeing people trading down in some cases bay buying more maybe after their paycheck and less at the end of the month. seeing more cash and less credit card in some cases. consumers are under pressure in the unemployment rate doesn't help that. i think we've seen some signs of stabilization. >> when you talk about private label, do you guys have private label? is that something you have expanded to try to tap into that tradedown? >> yeah, walgreens have about 20% of our business is private label on the front end, the self-serve business we call it. it's still grow and there's a
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lot more room to grow because of the value proposition that we can offer some consumers. >> is it really the same? i mean, is your walgreens when it says the same as listerine, is it really? >> i think the walgreens products are great. maybe better. i don't know. >> i'm just teasing you. thank you so much for joining us. enjoy the rest of your conference. >> thank you, michelle. >> we've got about 12 minutes before the closing bell. dow jones industrial average and the nasdaq still in negative territory. dow is off 74, nasdaq lower by 17. scott? >> the summer rally beginning one month ago today. where are people putting their money right now? you may be surprised by that answer. we're back in a second. tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one. tdd#: 1-800-345-2550 if i think i'm onto something i'll check it out,
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the summer rally celebrating its one-month birthday today. it's still an infant and many investors are skeptical whether the rally has legs. rebecca jarvis takes a look whether it can get to two, three months.
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>> we're actually talking about something that isn't a new strategy but fixed income etfs are attracting a lot of new inslester energy and a lot of new dollars picking up speed with investors hoping to mitigate the downside risks, protect against inflation ahead. investors continue piling into etfs like corporate bond fund betting that the market stabilization is going to let companies be better positioned to repay their debts and while these have already seen a big run-up in terms of price, analysts add they're also a good way to keep debt exposure in the portfolio, a more liquid way to keep it in the portfolio. the junk variety have still outperformed etfs are up basically since the market bottom in many lock step with the overall markets an also attracted major volume as the market reprices of that risk, corporate default expectations are falling a little bit. this is an area where people are
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putting more money and expecting better are sales ahead. inflation-protected securities are an interesting one known as tiffs, a best bet for protection. investors fearing our monetary policies are going to lead to inflation eventually. the analysts say if you believe that, then you got to park a part of the portfolio here in this place. what's interesting to note is as crude oil has gone up and it's hard to see really on the screen from you know, the increase in the tiffsetf. as crude oil goes up, he's etfs usually going g up along with them because what happens is that michelle, behind the protection, against inflation, you see them trying to protect against higher oil prices. as oil goes up, people are more interested in own them. >> you were talking about inflation protected securities.
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we had the auction today of relgs treasuries, the three-year. the government is trying to borrow a pile of money to fund these deficits we're taking on to fight the recession. the three-year went very well today. the question is the ten-year tomorrow and the 30-year the next day. >> right, the longer you get out on the yield curve, the more advanced in the future you get, the bigger question mark there is about whether or not peopling are r going to be interested in consuming especially as we grow deficits here and as we continue to want to have more out there.. the question is are these foreign governments places like china going to be interested in owning that debt longer out into the future. >> if you're worried about inflation like you were talking about with oil, why are you going to lend somebody money for 30 years to get a yield of less than 4%? right? that's the question. >> that is the question. that is absolutely the question. >> thanks, rebecca. >> coming up next is, we'll come right back with the closing count down. >> after the bell, cnbc is your
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